In a recent LinkedIn post, Lee McCabe offers a sharp critique of typical “value creation plans” within private equity, arguing that many focus on elaborate, often ineffective, initiatives rather than addressing fundamental revenue-driving activities. McCabe contends that the real levers for growth are frequently overlooked in favor of more complex, yet less impactful, strategies.
“Everyone in PE has a “value creation plan”. It’s usually 40 slides of heroic initiatives, and somehow none of them include the two things that actually move revenue in the real world.”
Challenging the Status Quo in PE Value Creation
McCabe highlights what he sees as a common blind spot in private equity strategies: the neglect of customer retention and the “front door” of customer acquisition. He suggests that the quickest path to “growth” is not necessarily through adopting new channels, vendors, dashboards, or AI pilots, but by shoring up the foundational elements that are “quietly leaking money every day.”
The Neglected Fundamentals
According to McCabe, these neglected basics include addressing customer churn, which is often “pretend[ed] is ‘normal'”, and improving the handling of inbound leads. He elaborates on the common failures in lead management:
“Inbound leads that get a slow reply, a bad handoff, a missed call, a half-assed follow up. Quotes that never get sent. Renewals handled like an afterthought. Service tickets treated like a cost centre instead of the cheapest upsell motion you’ll ever get.”
While acknowledging the appeal of strategies like “multiple expansion and pricing power,” McCabe insists that “most portfolio companies are losing the game in the first 10 yards” by failing to master these core operational aspects.
The Data Backs the Basics
McCabe supports his argument with data, referencing research that underscores the significant impact of retention on profitability. As Lee McCabe notes:
“Bain’s research shows a 5% lift in retention can drive 25% to 95% profit uplift.”
He frames this insight not as complex strategy, but as simple common sense. For McCabe, a true value creation plan must be more than aspirational; it requires accountability and measurable outcomes.
Defining a Real Plan
McCabe concludes by defining what constitutes a genuine plan versus mere wishful thinking. He argues that effective plans are characterized by clear ownership, consistent tracking of operating metrics, and defined consequences for failing to manage the fundamentals.
“If your value creation plan doesn’t have owners, weekly operating metrics, and consequences tied to the basics, it’s not a plan. It’s a bedtime story for the IC.”
McCabe’s post serves as a call to action for private equity professionals to refocus on the essential, often unglamorous, elements of business operations that are critical for sustainable growth and profitability.
📝 About This Content
This article is based on insights shared by Lee McCabe on LinkedIn.
📅 Originally posted on February 5, 2026 | View original post on LinkedIn →